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Talking to ET Now, Rohan Suryavanshi, Director Strategy & Planning, Dilip Buildcon, says the fact that we have elections in one and a half to two years from now, makes us confident that the government will be coming out with a lot ordering and that gives us a lot of comfort and optimism.

Edited excerpts:

There are many triggers keeping the entire infrastructure space pretty active with the government push now coming in for road building, the possibility of an NHAI IPO as well lingering in. What according to you are some of the latest developments on the infra policy front where you think companies such as yours can stand to benefit?

Like you rightly said, there are a lot of good noises that are happening in this sector. The government is planning an IPO for the NHAI. There is an increased number of ordering that they have sort of committed to give out. The Bharat Mala opportunity which is coming in the future is also very exciting.

A lot of things are happening, a lot of triggers coming up. Improving regulations, improving ease of doing business for contractors and developers and trying to mitigate issues which have cost this sector the pace that the government wanted it to.

The government is doing a lot of things. We are very excited about the number of opportunities that are coming in the road sector. Besides this, we are also very excited about the river linking projects which the government is saying that they want to come out with. If you look at the overall broader infrastructure segment -- whether it is metros, ports or railways -- there is work happening everywhere. For us, it good if the government is taking such keen interest in pushing for all of that. The fact that we have elections in one and a half to two years from now we, makes us confident that the government will be coming out with a lot ordering and that gives us a lot of comfort and optimism.

Your opportunity pie is increasing as well with the increasing push coming in from the government so which projects are in the pipeline for you, what is the order backlog as well as the L1 status on these projects?

We have bid for a whole bunch of projects right now. Currently, we are in the stage with about Rs 10,000 crore of bidding that we are currently doing right now.

One of the biggest sectors is roads. After that we are also looking at a lot of mining projects. So these are the two sectors. I am not a liberty to speak about specific projects that we are looking at or the ones that we are looking forward to in future but you will be seeing a very different Dilip Buildcon in the next few years.

We also did the largest road transaction in India’s history; we completed the sale of Rs 10500 crore worth of assets which has given us a lot of dry powder which will be releasing about Rs 1500-1600 crore of equity in the next two years. This will help in reducing our debt and this will also help us in winning new projects. So overall, we are very well prepared. I am not at liberty to talk about specific projects but there is work happening in each and every state and we are very agnostic between wherever new work comes in as long as it meets the specific criteria that we set for bagging projects.

Your competitive edge clearly comes from your prudent bidding strategy, early completion of projects and we have seen that the stock markets have also rewarded your stock from when you listed up until now. Tell me what kind of early completion bonuses are you expecting in FY18 or trickle down to the next financial year as well.

You are very right we are known for those things. In the last five years, we have won early completion bonuses of about Rs 320 crore. This roughly translates into 1.5% to 2% of our top line that comes only through early completion. Even last year, on a top line of Rs 5000 crore, we had an early completion bonus of Rs 106 crore. This year we are expecting a similar number. It will be between 1.5% to 2% of our top line and this year, we are expecting our topline to be upwards of Rs 6000-6300 crore. It will be upwards. It will be comfortable upward from there. We are expecting a similar number coming in this year as well and for the next year as well. That number should be in the same range.

What about the new focus areas that the government is extending out their attention on? Emerging sectors like metros, irrigation, affordable housing apart from roads. Are you looking at diversifying there?

Yes we are always looking at exciting opportunities to diversify into. In the last two-three years, from being a predominant road sector player, we have forayed into irrigation. We are building damns. We are building canals. We forayed into urban infrastructure where we were doing water supply project, where we were doing low-income housing projects and we have also forayed into mining where we were doing coal overburden removal. We have also bid for some metro projects.

Unfortunately till now we have not won anything in that sector but we continue to bid and we continue to be optimistic about that. Besides this, irrigation like I said earlier as well, we are very excited about the river linking project opportunities that will come out because we have done exceptionally well in that sector.

We are building two dams, very massive dams which we built in lesser time that was assigned for it. Both those dams were given about four years to be completed in. We have completed them in less than three years or we will be doing that very soon. Our strategy of doing all our projects on our own, using our own equipment, having our own manpower, all of that has helped us to win projects and complete them successfully before time in other areas as well.

What is your order book as well as margin guidance for the fiscal close?

The current order book that we have is about is about Rs 15,500 crore at end of June 30th. This year, we are expecting an incremental order flow of at least Rs 8000 to 10,000 crores. Margins should remain as they have in the past in the range of 18% or so.

We are among the more profitable companies in the sector because of the strategy that we follow of doing everything in-house and not giving anything external. We are expecting bumper year this year given the dry powder that we already have. We are expecting to launch NCDs and CPs this year and that will reduce the cost of borrowing further and make us better and stronger company in terms of balance sheet as well.